you write: "Now while it's understandable to see the currency slip against the poun, the yen or the euro, it's is inexplicable to me that the US Dollar should slip against the Samoan Tala."

The Bush administration is engaged in a purposeful effort to devalue the U.S. dollar. You may be unsurprised to learn that the Samoan Tala is not the target of this effort, but is merely a "beneficiary" - if you can call it that.

The purpose of Bush's campaign is to make U.S. exports cheap and make European exports expensive. It's another in a series of gifts to the U.S. business community - and is Bush's attempt at spurring the economy while he contiues to cut taxes for the rich and do nothing about jobs (although they would argue that this policy will have the effect of job creation).

Another side benefit to this scheme is the tourism balance, which you touched on in your last sentence. As the dollar goes down, it becomes more prohibitive for Americans to travel abroad. Similarly, it becomes cheaper for Europeans to travel here. So Bush's policies have the effect of keeping American tourism dollars in the United States, while attracting Euros to Disneyworld and other tourist destinations.

Bastard.

Quite apart from everything Brian said, there is a concept called purchasing power parity which states that if the interest rate on a country's debt goes down, the value of its currency relative to a fixed point should deflate as well, the point being that you should be able to get equal real interest rates in any two countries. Since rates on US debt have gone down significantly in the last three years, almost totally due to Fed action, the dollar has gotten weaker relative to foreign currencies that are traditionally weaker than the dollar.

The equiation has to do with what you would earn on your Samoan currency, compared to what you earn on US dollar denominated bonds. You could look it up. I am not an economist.